Manage episode 317431192 series 3257207
Companies have never had a requirement to be responsible to their employees, suppliers or community. Leaders have only had a responsibility to their investors. Thus, very little time or resources were spent by companies trying to be environmentally friendly or socially aware. But in the last 5 years a real movement has been created to push investors to force companies to be more environmentally and socially aware - and to make decisions that were better for the environment and society. The turning point happened when a small advocacy group was able to convince Exxon investors to unseat and replace 3 Exxon Directors with more ESG oriented Directors.
Today investors are unwilling to invest in companies that are not environmentally safe, secure and socially responsible. They've dropped out of investments, and directed their money toward investments that are improving the environment and social behavior - and back that up with good governance practices. And this has bled over toward customers and communities that are paying a lot more attention to a company's ESG behavior before investing - or buying their products. Increasingly business has to complete an ESG "scorecard" demonstrating they are monitoring their environmental and social impact, and taking actions to improve these metrics.
If you want to encourage customers to buy, communities to support you and/or investors to give you money it is important you demonstrate your environmental and social improvement programs as seller of solutions, employer and community member. This can harm your business if you ignore this trend. Simultaneously it is creating a tremendous number of new opportunities for leading companies - such as packaging, environmental clean-up, enhanced recycling, use of recycled material, pollution containment, etc.
- Are you paying attention to your environmental and social impact?
- Are you incorporating ESG in your Value Proposition and your strategic planning process?
- Are you implementing business practices that are more environmentally and socially responsible? Are you informing customers, employees, communities and investors about these practices?
- Are you implementing governance processes to make sure you remain environmentally and socially responsible?